Imagine you are in a grocery store; you go up and down the aisles filling your cart with various items, a combination of your needs and wants. You get to the checkout and as the items are being run through you realize that you don’t have enough cash to pay for it all; oh yah, in this scenario you actually use cash to pay for things. You are now faced with a choice, you can quickly scan over the items and pick which ones to get rid of, most likely this will be in the ‘wants’ category, or you can pull out the credit card and go into debt for it.This is how we typically live our lives; we make our choices then deal with the consequences afterwards. Considering the average Canadian debt level sits at around 167% of income, it would seem that we are heavily dependent on the debt option to get us through. As a result, debt levels rise and the ‘wants’ suffer. Now imagine that before you entered that grocery store, you knew exactly what you were going to buy and you knew that you would not have enough money to pay for it all outright. Now you have more options, you can be proactive instead of being reactive. You still have the same two options as before:
With the average Canadian debt level at 162% of disposable income, debt might be the most important thing to talk about. We have developed and fostered a culture of "now", and with the availability and ease of use of credit “now” has become more and more pervasive and it comes at a cost. So what is the cost of "now"? That depends and this might be a good place to start the conversation. What does credit cost? In the olden days, if you wanted to buy something you simply had to save up until you had enough money to buy it. Now, you can just swipe a card and be off enjoying your new purchase; but just how much that purchase will cost you depends on what interest rate you pay and on how long it takes you to pay that balance off.